Stock Smart Weekly (Mar 19, 2021)
StockSmart
Weekly Review
The market started on a strong note on the Senate election results announced on the last trading session of the previous week, rallying 2.23% on the first trading session. The KSE-100 in the following trading sessions remained volatile, where bullish sentiment from political victory of incumbent government was given a tough face-off by corporate income tax exemption withdrawals and potential inflationary pressures from electricity rate hikes - both necessary to unlock third tranche of IMF’s EFF facility (payment to be approved in coming week). Amid the aforementioned factors, double digit inflation expected in Mar’21 brought interest rate upcycle fears to the surface. Sector wise, new refinery policy in the offing entailing import parity based pricing and 10% duty protection on MS and HSD led to a rally in refinery sector (up 16.8%WoW). Overall, the KSE-100 closed at 44,901pts, up 2.54% WoW. Major news flow during the week included (i) Amid differences over resignations PDM’s long march put off (earlier to be held on 26th March’21), (ii) Govt expecting $1bn rollover by UAE, (iii) Power tariff may go up by PkR3.0/unit by Dec’21 and by PkR5.36/unit till 2023 to comply with IMF plan, (iv) Saudi tycoon in Pakistan to end impasse over KE sale, v) LSM growth up by 9.13% in Jan’21, (vi) textile exports witnessing a decline of 3.1%YoY in Feb’21, (vii) Privately-imported Covid shots arrive: govt backtracks on its decision of not keeping any price caps, and (viii) PD withdraws summary seeking non-payment of dues to 2002 IPPs. Top performers for the week were, i) BYCO (+28.5%WoW), ii) ANL (+18.1% WoW), iii) TRG (+17.5%WoW), iv) ATRL (+15.9%WoW), and v) UNITY (+13.0%WoW) whereas laggards were, i) AKBL (-14.7%WoW), ii) HMM (-13.5%WoW), iii) STJT (-11.6%WoW), iv) HMB (-7.5%WoW), and v) ABL (-7.0%WoW).
Outlook
After status quo in policy rate announced by MPC today, the market is likely to extend rally to some extent in the upcoming session. Key market movers in the upcoming week include: (i) IMF board’s approval to US$500mn tranche, (ii) payment of first installment to the IPPs as per agreements inked in Feb’21 and, (iii) government measures, if any, with regards to rising COVID cases.
AKD Research
Byco Petroleum Pakistan Limited is engaged in the production, marketing and sale of petroleum products. The Company is involved in the businesses of oil refining, petroleum marketing, chemicals manufacturing and petroleum logistics. The Company operates two business segments: Oil Refinery Business and Petroleum Marketing Business. The Oil Refinery Business segment is engaged in crude oil refining and selling of refined petroleum products to oil marketing companies. The Petroleum Marketing Business segment is engaged in trading of petroleum products, procuring products from oil refining business, as well as from other sources. It offers liquid fuels, including gasoline, jet fuel, ultra winterized diesel, furnace oil and bunker fuel; gaseous fuels, including compressed natural gas and liquefied petroleum gas, and lubricants. The Company's subsidiaries include Byco Terminals Pakistan Limited and Byco Isomerisation Pakistan (Private) Limited.
AKD Securities Ltd. is one of the leading securities firm in Pakistan, providing a comprehensive range of investor focused services, including equity brokerage, economic and securities research, investment banking and financial advisory services. AKD Securities accounts for more than 6% of the average daily value of the Karachi Stock Exchange. AKD Securities was the first brokerage house to launch an online trading platform in Pakistan in November 2002 and now has the largest market share with over 6000 customers. This has helped diversify and expand the retail investor base in the country and ushered in a whole new universe of investors to the stock market.
AKD Securities Ltd. caters to a diversified group of domestic and international institutional investors, high net worth individuals and upscale retail clients, including expatriate Pakistanis. With high quality research, unparalleled execution and distribution capability for both regular and large block trades, AKD Securities Ltd. has earned an outstanding reputation in the Pakistani securities industry.Outside of commercial banks, AKD Securities Ltd. is one of the biggest capital market firms in the country. AKD Securities is the leader in raising and providing risk capital in underwriting, market making and mergers and acquisitions in Pakistan. Good corporate governance and professionalism are emphasized throughout the firm and AKD Securities Ltd. is amongst the very few companies to have introduced a firm-wide comprehensive CODE of ETHICS, overseen by an independent compliance manager.Ultimately, our success is based on the quality of service we provide to our customers and the trust and confidence reposed in us by them. Our focus, therefore, remains on customer satisfaction at all levels in the company.
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